The steel drill bits, reamers and dies that Elliot Barnett’s family business supplies to distributors across the country help maintain bridges and keep planes in the air.
From his company’s headquarters in unincorporated Miami-Dade County, near Miami International Airport in Doral, he imports at least $3 million to $5 million dollars of cutting tools from China each year. His company, Dewitt Tool, prides itself on customer satisfaction and its long history in the U.S.
But soon, it will be forced to raise its prices as the ongoing trade dispute between China and the U.S. continues to escalate.
On Friday, President Donald Trump announced, in a tweet, that he would increase taxes on all Chinese goods coming into the country and demanded that businesses like Dewitt Tool stop doing business with China entirely.
“The future is simple: We will have to raise our prices,” Barnett said. “It’ll be passed on in the cost to build the bridge, to build the tunnel.”
Trump, incensed by retaliatory tariffs announced by China on Friday, said he would raise tariffs on $250 billion of Chinese goods to 30 percent from the current planned rate of 25 percent, set to start on Oct. 1. He said the U.S. would also increase tariffs on another $300 billion of imports to 15 percent from 10 percent, as originally planned. Those taxes are slated to go into effect on Sept. 1.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA,” he wrote on Twitter earlier in the day Friday.
China announced on Friday that it would impose tariffs of as much as 10 percent on $75 billion worth of U.S. goods as a retaliatory measure against Trump’s planned duties.
In a statement announcing the tariff increase, the Office of the U.S. Trade Representative called China’s actions “unjustified.”
Florida’s companies imported $10.7 billion in goods from China in 2018, an increase of 12.5 percent from the year before, according to Enterprise Florida. The state exported $1.5 billion in goods to China in 2018.
The state’s top imports include electrical equipment, data-processing machines and furniture, according to Enterprise Florida. Its top exports are gold, copper scrap and aircraft parts.
“The largest tech distributors in the world are also here,” said Ken Roberts, president of WorldCity. “Anybody who’s in that tech space is gonna be sourcing from China.”
Barnett said his company has been paying 25 percent in tariffs, and that he has tried to absorb the costs to avoid hiking prices on his products. His company has been holding weekly meetings to discuss the best way to raise prices in the future, and a 15-18 percent increase has been floated.
“I kind of have really absorbed everything, and it’s hurt my bottom line,” Barnett said. “But I’ve kept my customer base and I’ve kept my position in the market.”
Business groups responded negatively to Trump’s latest shot across the bow in the yearlong trade dispute, and stocks plunged.
The Dow Jones Industrial Average closed 623.34 points lower, or 2.4 percent. The S&P 500 dropped 2.6 percent, and the Nasdaq Composite slid 3 percent.
Myron Brilliant, the executive vice president and head of international affairs for the U.S. Chamber of Commerce, said in a statement on Friday that while China’s trade practices have been “unfair,” the trade relationship between the U.S. and China has been mostly beneficial to both sides.
“While we share the President’s frustration, we believe that continued, constructive engagement is the right way forward. Time is of the essence,” Brilliant said. “We do not want to see a further deterioration of U.S.-China relations. We urge the administration and the government of China to return to the negotiating table to complete an agreement that addresses concerns over technology transfer practices, intellectual property enforcement, market access, and the globally damaging impact of Chinese domestic subsidies.”
A previous version of this story incorrectly reported DeWitt Tool’s imports from China. The company brings in between $3 million and $5 million in tools from China per year.